U.S. Nonfarm Payrolls Disappoint in July 2025 with Just 73K New Jobs
The U.S. nonfarm payrolls report for July 2025 delivered a significant downside surprise, with just 73,000 jobs added, well below economists’ expectations of 110,000. Even more striking were sharp revisions to previous months: June’s figure was slashed from 147,000 to just 14,000, while May’s number was revised down by 125,000. In total, 258,000 fewer jobs were added in May and June than initially reported, signaling that the labor market may be cooling more rapidly than previously thought.
This marks one of the weakest three-month periods for job growth since 2020, raising fresh questions about the strength of the U.S. economic recovery and the Federal Reserve’s path for interest rates.
📊 Where Did Job Gains Occur?
Despite the overall weakness, health care continued to be a bright spot in the labor market:
- +55,000 jobs in health care
- +34,000 in ambulatory health care services
- +16,000 in hospitals
- +18,000 jobs in social assistance
By contrast, employment was little changed across most other major sectors:
- Construction
- Manufacturing
- Retail and Wholesale Trade
- Transportation and Warehousing
- Financial Activities
- Leisure and Hospitality
On the downside, federal government employment fell by 12,000 in July and is now 84,000 below its January 2025 peak.
Read More: US Jobs Report in June Beats Expectations
Key Takeaways from July 2025 Nonfarm Payrolls
- Nonfarm payrolls rose by 73K, missing the 110K forecast
- June revised sharply down: from 147K → 14K
- May also revised down by 125K
- Health care led job growth with 55K new jobs
- Federal government jobs continued to decline
- Weak job growth could affect the Fed’s rate decisions
U.S. Employment Data Snapshot
| Category | July 2025 | June 2025 (rev) | May 2025 (rev) |
|---|---|---|---|
| Nonfarm Payroll Change | +73K | +14K | (Cut by 125K) |
| Health Care Jobs | +55K | N/A | N/A |
| Social Assistance | +18K | N/A | N/A |
| Federal Government Jobs | -12K | – | – |
| Net Downward Revision (M+J) | – | -258K | – |
Market & Policy Implications
The weak jobs report and substantial downward revisions will likely fuel speculation that the Federal Reserve may hold off on further interest rate hikes or even consider cuts sooner than anticipated. Slowing job growth, especially in sectors outside of health care, points to waning momentum in the broader economy. Markets will be closely watching upcoming CPI and PCE inflation data, as well as Fed Chair Powell’s next speech, for clues on policy direction.
What’s Your Take?
Are we seeing a turning point in the U.S. labor market? 💼
Drop your thoughts in the comments or share this article with fellow market watchers!
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